The five-year shareholder returns and company earnings persist lower as Malakoff Corporation Berhad (KLSE:MALAKOF) stock falls a further 6.1% in past week

The main aim of stock picking is to find the market-beating stocks. But the main game is to find enough winners to more than offset the losers So we wouldn't blame long term Malakoff Corporation Berhad (KLSE:MALAKOF) shareholders for doubting their decision to hold, with the stock down 47% over a half decade. We also note that the stock has performed poorly over the last year, with the share price down 25%. The falls have accelerated recently, with the share price down 15% in the last three months.

After losing 6.1% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Malakoff Corporation Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Looking back five years, both Malakoff Corporation Berhad's share price and EPS declined; the latter at a rate of 4.6% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 12% per year, over the period. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 11.84.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Malakoff Corporation Berhad's key metrics by checking this interactive graph of Malakoff Corporation Berhad's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Malakoff Corporation Berhad's TSR for the last 5 years was -26%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Malakoff Corporation Berhad shareholders are down 20% for the year (even including dividends), but the market itself is up 0.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Malakoff Corporation Berhad (1 makes us a bit uncomfortable) that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on MY exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.